It’s on. Oh boy is it ever on. You’re finally going to find out how deep resentment against the financial status quo runs. With Ohio governor John Kasich vanquished from the field, Donald Trump is the presumptive Republican nominee for president of the United States. That’s not something I would have expected to write six months ago. But here we are.
Seen from across the Atlantic (and writing as an American) it’s tempting to look at Trump as purely an American phenomenon; a candidacy that could only happen in a country with a soft spot in its brain for celebrity. But don’t be too quick to rush to judgement.
Trump has tapped into the same sentiment that’s behind Brexit. Globalisation hasn’t been good for the middle class. It’s been good for immigrants (like myself) and financial, political and media elites. But that’s really the point. It’s been good at the extremes and extremely destructive for the middle. The centre is most definitely not holding.
They never saw him coming
Trump’s appeal surprises the establishment because it hasn’t been negatively affected by trade agreements, mass migration, slow GDP and jobs growth, and the general stagnation experienced by wage earners all over the world as the price of labour goes down. The “insiders” never saw him coming. And now they’re surprised he’s here. They’ll probably underestimate his appeal in a general election as well.
You’d only make that mistake if you were foolish enough to believe that Hillary Clinton’s credentials – an entire life spent living off the public purse – make her the inevitable choice. It’s exactly the sense of inevitability that’s caused the popular rebellion on the left and the right. The contest between the consummate Washington insider and the outspoken, brash, vulgar, and occasionally boorish Trump will be a treat to watch.
Sometimes people vote a certain way simply because they don’t like being told what to do. Is now one of those times? Does any of that matter to UK investors?
Not in any obvious way. The Brexit vote is coming up quickly. And most British savers and investors are not concerned with American politics. But if Trump doesn’t implode… if it looks like he’ll be a tougher adversary than the insiders expect him to be, it may just fuel and embolden anti-establishment sentiment here in the UK.
This won’t be a high water mark for middle-class discontent. It will be a sea change. Keep an eye on the pound and the dollar. That might provide some clues.
Category: Geopolitics